1. Field of the Invention
The present invention is directed to a financial management system that provides full business support for the offset of payments to parties against delinquent debts when the payments, debts and receivables are tracked by different groups or entities.
2. Description of the Related Art
As part of their business processing, many organizations perform accounts payable and accounts receivable functions. In larger organizations (such as the federal government and multinational corporations) these functions are typically supported by the use of a financial management system (such as the American Management System—AMS—Momentum™ system). Many large organizations (like the federal government or the multinational corporations) have distinct operational entities (e.g., federal agencies in the federal government or independent entities with the corporation) that each perform financial management functions such as accounts payable and accounts receivable. Each of these operational entities run the financial management system in support of their operations.
One of the key business functions in accounts receivable is the management of delinquent debt (i.e., overdue, uncollected receivables). One mechanism for managing delinquent debt is to offset any payments to the debtor by the amount of the delinquent debt. Traditionally, for organizations with distinct operational entities, there were no mechanisms in place that could link one entity's delinquent debts with another entity's payments. For example, federal agency ABC may have delinquent debt with a vendor while federal agency XYZ is making payments to the same vendor.
Recently, there have emerged third-party mechanisms (such as the Treasury Offset Program (TOP) supported by Treasury FMS in the federal government) that provide for the centralized collection of delinquent debt for the purpose of offsetting payments to debtors. Systems such as TOP handle the issuance of offset payments through the matching of payments against delinquent debts. TOP specifications are defined in the Treasury Offset Program Agency Implementation Guide of May 1997, published by Debt Management Services of the Financial Management Service of the U.S. Department of Treasury incorporated by reference herein.
The traditional financial management systems do not provide for the support of such offset programs. What is needed is a system that fully supports the offset of payments in a situation where different organizational entities handle different aspects of the offset process.